Burson-Marsteller is a PR firm with close ties to the Clintons. CEO Mark Penn was Hillary Clinton's 2008 presidential campaign strategist. The firm now has been humiliated after it was revealed that Facebook secretly paid it off to attack Google. (Source: PRNewser)

Not surprisingly, Google and Facebook have been
increasingly butting heads as both companies try toencroach
on each other's online territories. But even amid that backdrop,
Facebook's latest move may seem particularly shocking and audacious to some --
it secretly hired a public relations firm to trash Google, spreading
questionable attack stories about its rival.

I. Google -- a Social Network?

The story began when Google announced a tool
calledSocial
Circle, which essentially transformed the company's popular Gmail email
service into a social network. Previously, Gmail users could see
information about their friends only. With Social Circle, friends of
friends also became visible, and new types of information were presented.

Among that information was content from Facebook.
Much like Google did with its Google News syndication service, it merely
mastered scraping/collecting this information -- it was not hosting the first
hand posts.

Ultimately, Google's ability to grab Facebook
users' data so easily, is largely thanks to Facebook's own permissive design,
which exposes a great deal of information without careful configuration of your
account settings. Mark Zuckerberg, CEO of Facebook, recently gave the now
infamous opinion thatusers'
just don't care about privacy.

But Facebookdid care
that Google was taking its info and using it to create a new social network of
sorts. A Facebook spokesperson isquotedbyBusiness
Insider as saying, "We are concerned that Google may be
improperly using data they have scraped about Facebook users."

(Google responded that it was unaware of this
concern and was looking into it.)

II. Secret Attack

Now if that were the end of the story, Facebook
would be seemingly in the clear. But those remarks came onlyafter the
company executed a very different kind of strategy to attack its foe.

Facebook hired Burson-Marsteller, a veteran
58-year-old PR firm. The company's CEO, Mark Penn, had worked as a
political consultant for former U.S. President Bill Clinton and was the chief
strategist for Hillary Clinton's failed 2008 presidency bid. The firm
itself was among the best known firms in Silicon Valley.

But with their reputation on the line they
amazingly agreed to participate in an audacious scheme to try to stir up the
online news community, spreading questionable stories accusing Google of
privacy violations.

Completely forgetting to mention Facebook's
concerns about its proprietary information being scraped or the fact that it
was working for Facebook, Burson-Marsteller employees reached out to their
journalist contacts and tried to sell them on a story that Social Circle was
violating users' privacy.

They wrote:

[Social Circle is] designed to scrape private data and build
deeply personal dossiers on millions of users—in a direct and flagrant
violation of [Google's] agreement with the FTC. The American people must be
made aware of the now immediate intrusions into their deeply personal lives
Google is cataloging and broadcasting every minute of every day—without their
permission.

Now bear in mind, all Google was doing really was
exposing secondary users' information -- similar to what Facebook does on a
daily basis. And the service was an opt-in, with only customerschoosing to
participate having their info shared. In other words, Facebook's agents
glossed over the real story -- that Facebook was unhappy with Google for
scraping its data -- and instead manufactured a largely contrived story about
"privacy" violations.

Like most ill advised schemes, the plot by
Zuckerberg and Company (or more likely, Facebook PR boss Elliot Schrage)
did not play out well.

Among those they contacted was Chris Soghoian, a Ph.D candidate
at the University of Indiana and famous tech blogger. No stranger to
controversy Mr. Soghoian was intrigued by the supposed story, so he dug into
it.

But as he investigated the story, he smelled a
rat. As he said, Burson-Marsteller was "making a mountain out of
molehill". So what was their real agenda?

He was determined to find out. He began
probing the firm about who had employed them to share this information.
Burson-Marsteller refused to say. So Mr. Soghoianpublished the entire dialoguebetween
him and the PR firm online.

At that point Burson-Marsteller perhaps should
have seen the writing on the wall and decide to cool off the current attacks
and plot a new campaign. Instead, though, they chose to forge ahead,
going for bigger fish.

The campaign really imploded when former
CNBC tech reporter Jim Goldman, and John Mercurio, a former political reporter,
pitched the story toUSA Today.

The publication investigated the claims and, like
Mr. Soghoian, found them to be mostly untrue. At that point they became
suspicious. Why was this PR firm pushing so hard?

They tried to get information from the firm,
itself, but their contacts clammed up. Writes the publication,
"After Goldman’s pitch proved largely untrue, he subsequently declined USA
Today’s requests for comments."

USA Todaypublisheda story
revealing that a top-level PR firm was attacking Google in an apparent smear
campaign. The story was now drawing some real attention. But no one
knew who was truly behind the campaign. Fingers initially pointed at
Microsoft Corp. (MSFT) or Apple, Inc. (AAPL) -- rivals of Google's in the smart phone,
search, advertising, and operating businesses.

But eventually several publications discovered
that it was Facebook who paid off Burson-Marsteller. That development wasfirst
reportedby Dan Lyons ofThe Daily Beast.

The full story of Facebook's campaign has
now been exposed and the tables have turned. For some -- particularly
those who watched the unflattering portrayal of the site's leadership in the
movieThe Social Network -- these developments may
not surprise. But for the vast majority of the public, this comes as
quite a shock and represents one of the internet's golden boys losing a bit
more of its luster.